TVS Motor explores alternative sourcing to tide over rare-earth magnet crisis

Time of India

2 days ago

TVS Motor Company
is actively exploring alternative sourcing options to mitigate short and long-term disruptions caused by the
rare-earth magnet
(REM) crisis.
The company's top management said during the Q1 FY26 post earnings call that it was able to sustain daily production of its
electric vehicles
despite supply chain constraints triggered by China's export restrictions on REMs. Director and CEO of TVS Motor,
K N Radhakrishnan
, said the company was evaluating options beyond China to secure a stable supply of rare earth magnets. 'We are actively working on heavy rare earth element-based solutions and exploring sourcing from alternative countries to reduce dependency,' he said.
TVS Motor is also relying on existing inventory to tide over the crisis. 'Some developments are in progress. I may not be able to give an exact timeline, but we are looking at other countries apart from China for sourcing,' Radhakrishnan added.
The company recently announced plans to launch electric motorcycles and bicycles this year. While the projects remain on track, it is yet to finalise a launch timeline given the raw material supply scenario.
The rare earth shortage has already begun to impact other players like Bajaj Auto which has cautioned a grim August due to inventory depletion. 'Our component inventory saw us through until June but we are down by half in terms of production this month and am afraid we are looking at a zero month in August,' Bajaj Auto MD, Rajiv Bajaj, told The Economic Times.
For the two-wheeler industry, which has been leading the
EV adoption
wave, a prolonged shortage could derail production momentum and slow industry growth. Carmakers like Hyundai, Maruti Suzuki, and Mahindra & Mahindra have reported no immediate disruptions due to the REM crunch.
Norton's India plans
TVS Motor plans to bring the iconic
Norton brand
with plans to launch multiple motorcycles in FY26, the first set of offerings since it acquired the British brand in 2020. 'India is a key market for Norton,' Radhakrishnan said, adding that the company would also launch the brand in the UK and other key European markets.
In India, TVS will adopt a premium distribution strategy and invest significantly in brand marketing. Of the INR 2,000 crore investments earmarked for this fiscal, a large part will go towards EV development, Norton's relaunch, digital initiatives, and global expansion.
Export momentum, domestic outlook
TVS reported its highest-ever quarterly exports at 3.52 lakh units, led by a strong rebound in Africa. The company remains optimistic about recovery in other key markets such as Sri Lanka and Nepal, although challenges persist in Bangladesh.
On the domestic front, it expects a positive demand trend, supported by a favourable monsoon and a likely recovery in rural markets. Additionally, improved retail financing is anticipated on the back of a 100-basis point reduction in bank lending rates over the last six months.